Beyond Bitcoin: Blockchain - JD Supra

Oct 31, 2015 - with digital signatures and then requires verification over ... transactions. Unlike a digital file on your computer, a bitcoin cannot be copied and ...
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IP, Information & Innovation White Paper

Beyond Bitcoin: Blockchain The Essential Building Block in Designing the Future

Contents The Mysterious Origins of Bitcoin

1

Bitcoin 101 – A Primer

2

The Blockchain

2

A Bitcoin Transaction

3

Summary

3

Blockchain 101

4

How It Works

4

Advantages of Blockchain

5

Disadvantages of Blockchain

5

Summary

6

U.S. Regulatory Landscape

7

State Regulation

7

Federal Regulation

9

Enforcement

11

Conclusion

11

International Regulatory Landscape

12

Europe

12

Asia

14

The Americas

14

Africa

14

Insuring Bitcoin and Bitcoin Business

15

Does Bitcoin Raise Unique Insurance and Underwriting Issues?

15

Potential Insurance Coverage Under Traditional Policies

16

Bitcoin-Specific Insurance

17

The Bottom Line

18

Applications in Capital Markets

19

Greater Efficiencies

19

More Security and Transparency

19

“Smart Contracts”

20

Potential Risks

20

Conclusion

20

Bitcoin, Privacy, and Reidentification

21

Intellectual Property

23

Bitcoin’s Open Source License

23

Other Blockchain Application Licenses

23

The Rise of Blockchain Patents

23

Social Impact

25

Lowered Transaction Fees Mean More Money for Causes

25

Greater Transparency

25

Access to Financial Services

25

Financial Empowerment

25

Improving Governance and Minimizing Corruption

26

Summary

26

Closing Note

27

Glossary of Terms

28

Key Contacts

32

Endnotes

33

The Mysterious Origins of Bitcoin Introduction Though the following chapters are mostly devoted to informing and enlightening the reader about the potential of cryptocurrency and the underlying blockchain technology, the origins of these developments are somewhat shrouded in mystery. Halloween 2008 may have been a particularly frightening one, as the world economy was facing its most dangerous crisis since the Great Depression. Yet, it also happened to be the day that Bitcoin, the most widely used cryptocurrency to date, was introduced in a rather simple and unassuming email to several hundred members of an obscure mailing list comprising cryptography experts and enthusiasts. The sender, known only as Satoshi Nakamoto, wrote: “I've been working on a new electronic cash system that's fully peer-to-peer, with no trusted third party,” followed by directions to the link http://www.bitcoin.org/bitcoin.pdf, a nine-page white paper about a peer-to-peer trustless system of digital “currency” that purports to solve the problem of doublespending. After first becoming operational in January 2009, Bitcoin and its related progeny have exploded in just a short number of years. Exactly seven years after the initial enigmatic email was sent, the October 31, 2015, cover of The Economist featured an article on the blockchain (the technology underlying Bitcoin), dubbing it “the trust machine.” Blockchain technology, which is described below, provides a cryptographically secured ledger that can be examined by